The Consumer Impact Of An End To "Unlimited" Mobile Internet

Last week, O2 in the UK and AT&T in the US announced an end to "unlimited" mobile data on their smartphone tariffs.

Many have argued -- some discussed with me on twitter last week -- that the impact on consumers will be minimal as very few consumers currently use a greater amount of data than the new data limits. This is only a part of the story. There will be unintended impacts as the new limits will alter mainstream consumer behaviour:

  • The perception of "unlimited" is as important as the reality. Like the word "free", "unlimited" is a powerful word in helping consumers feel sufficiently comfortable to experiment with the mobile Internet. Any sense that a consumer will incur extra costs, or a glacial throttled speed, as a result of using too much data will cause consumers to alter their behaviour. And, as mobile Internet adoption is still relatively small, this could cause a slowdown in usage that will harm the mobile industry. Handset makers will see slower demand for advanced smartphones while operators will see lower revenues, alongside the lower data costs that they so desire.
  • Consumers' expectations have been set by their home broadband experience. Before the arrival of unlimited mobile Internet tariffs three to four years ago, adoption of mobile Internet was tiny. The vast majority of new mobile Internet users never used the older tightly limited mobile data tariffs -- the time when 10Mb was a generous bundle -- but the new consumers that have started using mobile Internet in the post "unlimited" data era have been conditioned by home broadband. In the home, most packages are either unlimited and marketed as such, or so generous with their data limits so as to be effectively unlimited.

 

In a similar vein, I'm unconvinced that the widely publicised AT&T and O2 moves will mean an end to "unlimited" mobile Internet tariffs across the board in Europe. In diverse countries across Europe there is fierce mobile operator competition. The iPhone is non-exclusive in most countries. Other advanced handsets typically enjoy brief periods of exclusivity before being offered on all operators.

This competitive dynamic enables consumers to pick and choose the best offer from the variety available, and so encourages mobile operators to differentiate. O2 showed its hand early with its new iPhone and smartphone tariffs last week, I expect we will see a variety of options from the six operators in the UK that sell the 3GS today or have announced they will sell the iPhone4. In markets with fewer mobile operators -- such as France -- and a lesser competitive dynamic, the range of offers will likely be more uniform.

Foursquare’s Starbucks Mistake: Five Ways Foursquare Advertising Is Getting Less Interesting

Foursquare screenshotFoursquare, the geolocation social tool, has been a media darling as of late.  Not only is it growing, but people innately understand the monetization model, which is not something you can say about every social site and tool.  As people “check in,” or report where they are to their networks, Foursquare serves them offers from nearby businesses.  It’s a win-win-win situation: Businesses can market to people who are able to immediately take action; Foursquare earns revenue; and users get valuable offers they can use.

But Starbucks’ current program on Foursquare may kill the goose that lays the golden eggs (or at least demonstrate how that goose may die a slow, lingering death of neglect).  I believe (and I’m curious if you agree) that Starbucks’ ubiquity combined with the offer’s difficult redemption is decreasing attention for Foursquare’s other offers.  If other large chains follow suit with similar promotions, those “Special Nearby” tabs within Foursquare’s mobile apps won’t get as much notice, and that means problems for advertisers on the Foursquare platform.

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I Have Seen The Future, And The Future Is Xbox Kinect

It's late, this is just a short note to let you know that today I saw the future and what I saw was so stunning I couldn't go to sleep without telling you about it first. The future is the new Xbox 360 that debuted at Microsoft's E3 press conference today -- not just the improved hardware which ships to stores today and costs the same as the previous hardware -- but Xbox Kinect. This is Microsoft's long-awaited full-body natural user interface (NUI) for the Xbox 360, previously codenamed Project Natal and now branded as Kinect.

Kinect is everything. Kinect is the future of everything. Kinect is to the next decade what the operating system was to the 1980s, what the mouse was to the 1990s, and what the Internet has been ever since. It is the thing that will change everything. Once we've all been Kinected, we will never go back. You'll shop, communicate, chill out, engage, and debate using technology that can see you, image you in three dimensions, and interact with you in ways that are cooler than the most far-out science fiction, yet completely natural. 

I could explain it, I could try, but I won't. Instead, I'll just encourage you to watch the last hour or so of the press conference yourself (though if you follow my link, you may also want to watch the first few minutes just to catch the pre-game interview with Felicia Day -- isn't she adorably nerdy?).

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Nielsen Joins Forces With McKinsey For Social Intelligence Consulting

More news in the Social Intelligence world today, as Nielsen and McKinsey launched a joint partnership to compete deeper in social media. Through "NM Incite," Nielsen combines its Buzzmetrics listening platform technology with McKinsey's management consultants, to offer a broad range of social consulting influenced by social media data and analytics. I spoke to the team earlier and learned that this venture is both a response to growing customer demand for social business consulting and a proactive step in building up offerings that will meet enterprises' future needs, as social media spreads inside and outside the business.

My quick take on this is that I see the announcement as a good leading indicator of the social media market: Many businesses want to harness the power of social media data, but few are currently prepared to make those steps on their own. Businesses need help turning social media data into action. This year many listening platforms have ramped up their consultancy staff and offerings in efforts to keep up with this growing demand. As I'll profile in an upcoming research report on listening platforms' consultancy services (in editing now, likely publishing in a few weeks), successful vendors have a strong dashboard for self-service customers along with professional services teams for data analysis, custom reporting, strategy guidance, and overall support. Now, Nielsen and McKinsey's joint venture ups the ante of the level of consulting services listening platform vendors provide.

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Marketing Innovation Must Be Planned And More Ambitious

Many of the CMOs I engage with are adept at dealing with change. Marketers have to be adaptable these days, right? We're all playing in new channels and at different ways of interacting with customers. 

But through my discussions with marketers, I've noticed two things: 1) Most marketing organizations are reacting to, rather than driving, change, and 2) marketers aren't reaching far enough. 

Why do I call marketing reactive? Well, CMOs don't consider themselves change agents, and that's despite rapid changes in consumer behavior and the new possibilities technology offers them. Indeed, marketers see their own company's efforts at marketing innovation as middling, according to our September 2009 Global Marketing Leadership Online Survey (see figure below). I suppose that's to be expected. Marketers have a job to do, business to deliver, budgets to protect, and bosses to satisfy. Innovation isn't often part of their job description . . . but it should be. 

 

 

As a first step to making innovation a more important part of marketing's role, CMOs must define their marketing innovation strategy. I've structured a framework and process for doing just that in my new research.

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Marketing To Latin Americans Is A Long-Term Commitment

I am excited to announce that my first report that draws from our Latin American Technographics® data — entitled Understanding Latin American Online Consumers— is now available. (For Forrester clients who do not subscribe to our Latin American Technographics data, there is a shorter version of the report that you can access here.) I hope that our readers find a lot of valuable takeaways in this report. One aspect I want to highlight here is that understanding the Latin American market requires a long-term commitment.

Although the Internet has been around for almost two decades, Latin American’s active presence in the online world is relatively new. Our data shows that 58% of metropolitan Brazilians and 53% of metropolitan Mexicans are online at least monthly or more. While these may sound like exciting numbers for developing markets, two caveats stand out to me: 1) non-metropolitan populations will have much lower penetration, and 2) consumers in these metropolitan markets are just starting to familiarize themselves with the Internet — as evidenced by their generally lower Internet activity compared with other regions we cover. However, certain trends, such as the use of social media, suggest ways in which companies can connect with certain Latin American consumers online.

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The End Of "All-You-Can-Eat" Mobile Data Plans?

Following AT&T's decision in the US ten days ago (see my colleague Charles Golvin's take here), there's a hot debate as to whether European operators will follow suite and stop their unlimited mobile Internet pricing schemes.

O2 UK announced no later than last Friday that it will stop it and introduce various caps: from 500MB for the cheapest one (GBP25 with 100 minutes and unlimited texts) up to 1GB for the most expensive (GBP60 for unlimited voice/SMS and 1GB of mobile Internet).

According to the press release, 97% of O2 smartphone customers would not need to buy additional data allowances, as the lowest bundle (500MB) provides at least 2.5 times the average O2 customer’s current use. In short, just 3% of customers will have to pay extra.

Other UK operators as well as KPN in the Netherlands and Orange France have shared indications that they will follow suite and that this pricing scheme is outdated. Here are a couple of thoughts:

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Social Intelligence Meets PR

On this blog I write about the importance of social media channels as a data source for Customer Intelligence professionals. Although that topic may be a bit esoteric, the concept of using social media data to inform business decisions spans well beyond just Customer Intelligence. Today I'm going to diverge from the CI pro because in today's Web driven world of vast amounts of metrics and analytics, more and more businesses turn to data-driven decision making. One of the business lines benefiting most from this today is Public Relations.

PR's gone through a dramatic evolution over the last decade and has been reinvigorated by social media. PR teams' day-to-day tasks shifted from news clippings and phone calls, to online media monitoring and emails, to today's social media monitoring and tweeting with influential sources. Social media, and the wealth of data it holds, provides PR professionals with more information to better conduct their work. Through social metrics they can identify and track influencers, better measure the spread of their company's coverage, and more quickly track potential crises before they spread. This should be no surprise to most, as many of social media's early mavens are also some of PR's leaders.

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B2C Marketers Say Loyal Customers Will Drive Them To Innovate

I hadn't realised it was so long since I posted. Let's chalk it up to May Madness, which has more to do with trains and planes than basketball. 

Some of you may know from previous posts that I have been writing about the innovation of marketing. My new research, including a framework for creating a marketing innovation roadmap, should be live very soon. 

Being on my marketing innovation kick, one of the questions I most ask marketers these days is what factors will lead them to innovate their marketing. Below you'll see the top 10 of what our recent panel survey of B2C Marketing Leaders said. The first on this list is near and dear to my heart: Loyal customers. 

B2C Marketers pick their innovation drivers

How will increasing customer loyalty impact your business? How will you use it for good? 

I'm hoping we'll invest less upfront in media and invest more in services to build custom further -- you know, something like automatic replenishment while reusing containers. Or perhaps pluck up the courage to try interesting pricing models linked to longevity. Or manage access based on behavior: "Sorry, those detergents are reserved for our best customers." Or engage in real learning relationships that mean the loyal customer will always get the product and service he or she is after. 

What drivers are top three in your list? And what are you doing about it?   

Oh, one thing to know, B2B marketers set different priorties for their drivers. More on them next week. 

The Data Digest: Interest In Mobile Content In APAC

Consumers in Asia Pacific are the most active mobile phone users globally, but does this usage translate into spending money on mobile services?  Our Technographics® data shows that South Korean mobile phone owners lead in buying content or services for mobile phones. Each country in the Asia Pacific region has its specific mobile content preferences. Ring tones and ringback tones are the most popular service, followed by games and music.

Mobile content buyers are mostly young technology optimists with higher incomes. There are, however, a few interesting exceptions in different countries. One-third of South Korean buyers fall into the 30-to-39 age bracket; more than half of Indian mobile consumers are highly entertainment-oriented; and about 40% of Chinese spenders are highly career-driven.

If you're interested in Forrester's opinion on how this translates to the US, you can listen to the following podcast 'Will consumers ever pay for content again?' by James McQuivey.